As this year draws to a close, it’s fair to say that 2020 has been a disruptive year. From a global pandemic, to a steep decline in GDP, to construction shutdowns, this year will be one we won’t forget. For contractors, 2021 will continue to bring uncertainty. In a recent report, Dodge Data and Analytics’ Chief Economist Richard Branch notes that, “although the economy bottomed out in the second quarter…growth is expected to move sideways through 2021.” The Portland Cement Association’s (PCA) Fall Cement Outlook Briefing expects “cement consumption, based on the weighted average of three different economic scenarios, will lessen by 1.5% for the remainder of 2020 and 0.9% in 2021.”
As our economy resets and recovers from this pandemic, how can contractors prepare for 2021? While there's no crystal ball, here are some tips that could help lessen the impact in uncertain times.
Be Prepared to Pivot
They say that opportunity is present in any situation, and COVID-19 proved that many businesses thrived because they chose to meet changing demands. While many construction verticals like commercial construction slowed, there were some bright spots. According to the Construction Financial Management Association’s (CFMA) Confindex™ Survey, “some construction segments including fulfillment centers, data centers, certain manufacturing segments and eventually healthcare are poised to improve because of the pandemic.”
So, what does that mean for contractors looking for ways to change course? Instead of taking a blanket approach, you can become aware of advanced concrete mixes that add value to construction segments that remain strong in these times. For example, social distancing and work-from-home mandates are driving demand for data centers. Thermaflow™ Thermal Fill is specially formulated to dissipate heat generated by buried cables that supply constant electrical power. Advanced mixes can also be used for more durable concrete flooring in fulfillment centers. Becoming aware of tools that can help you specialize in thriving areas can help you stay ahead of your competition.
Do More with Less
Unfortunately, COVID-19 has intensified issues around labor and increased the scrutiny on owners looking to obtain loans for projects. In a recent survey conducted by the Associated General Contractors of America (AGC), “the pandemic has exacerbated the industry's persistent labor shortage, with 44% of firms that tried to recall laid-off or furloughed workers saying that some staff have refused to return to work, citing a preference for unemployment benefits, virus concerns or family responsibilities.”
When it comes to lending, CBRE’s Flash Call Report notes that lenders are becoming more conservative and soft on providing loans to owners who don’t have experience or the means to address short-term schedule interruptions.
In an environment where there’s less work, less labor and less capital available, contractors should be prepared to demonstrate how they can do more with less and ensure they have processes in place to keep construction safely moving. Now’s the time to rewrite your approach and learn about new products that can help you accelerate schedules with less labor. Agileflow® Self-Consolidating Concrete is one such solution. It places with less labor and flows around heavy rebar without impacting structural integrity. In an environment where social distancing is encouraged, this mix also alleviates laborers from working side-by-side while placing concrete.
Listen to the Market
Owners, architects and engineers are still thinking about issues and methods that will change the way we design, construct, and deliver projects in the future. One movement that continues to gain backing from major corporations and real estate powerhouses is lowering carbon emissions.
In addition to some corporations committing to becoming net zero within the next 30 years, states and municipalities are leading on addressing climate change in the absence of federal action. New York State is in the process of developing the New York State Low Embodied Carbon Concrete Leadership Act, a new procurement standard that will leverage the state's substantial concrete purchasing power and place weight behind mixes with lower carbon footprints. The Colorado Department of Transportation (CDOT) is also at the forefront of changing their specifications to increase the use of portland limestone cement (PLC) and fly ash in order to lower the carbon emissions of construction projects.
Contractors who want to gain an early competitive advantage should listen to the market and become aware of tools and products that help owners understand the global warming potential (GWP) of specific concrete mixes. ECOPact is one mix that offers a range of low-carbon levels, from 30% to 100% less carbon emissions compared to standard (CEM I) concrete. Those who understand the issues and embrace tools that promote transparency and sustainability can differentiate themselves in a tough market.
One Final Thought
As our country continues to face challenges throughout 2021, it’s important to recognize that fatigue can impact health and safety. Good communication and support can help your employees stay safe, cope mentally, and connect to a deeper sense of stability. While you set your business strategy for the coming year, be sure to make your people a central part of that strategy.
While the next year will take time to normalize, the construction industry is resilient and essential to the health of our economy. If you look for the bright spots, listen to the market and prepare for change, you’ll position your business for new opportunities in the coming year.